Managing Tax-Advantaged And Non-Tax-Advantaged Asset Allocation

[Bryan Hancock]

It is pretty amazing to me how much money can be stuffed away in tax-advantaged accounts if you structure things properly and avoid controlled group issues.  What is becoming increasingly clear to me is that the control/non-control item needs to be weighed heavily in deciding where to stuff cash that comes out of projects.  Self-directed funds really can't be actively managed in my own projects and thus funds deployed there will have:

1.  Lower returns (Bad)

2.  Less time investment (Good)

In other words less labor will be imputed into my return calculations for passive investments.  We can debate the merits of this and what constitutes "a job," but that is not really what I wanted to explore in this thread.  

How do you go about balancing keeping cash for your business that is actively managed and placing funds in SoloKs, SDHSAs, etc.?  Maximal after-tax profits should be desirable in THIS tax year, but it may be a long-term loser as compared with investing passively for a period of time in tax-advantaged accounts.  This discussion obviously depends on your personal circumstances and desires, but I was wondering how people approached it in general.  

An example may be helpful:

-Investor makes $800k in profits in a tax year

-Given the investor's business circumstances they have the option of contributing $200k+ to tax-advantaged accounts (HSA, Roth, SoloK, etc.).  Assume investments self-directed in these accounts will make 15-20% passively

-Excess dollars can be invested actively for returns greater than those in the passive investments in the tax-advantaged accounts.  For our example assume these funds will make north of 30% with returns in excess of 50% not being uncommon

How would you go about balancing where to allocate the cash if the goal was to have a balanced active and passive approach to investing?  The active approach seems like the winner if the sole intent is to maximize after-tax profits.  The passive approach seems like the winner if the goal is to maximize free time and the degree to which the money works for you instead of the other way around.

Would a balanced approach of fully funding the tax-advantaged accounts and using the excess to fund business operations seem prudent?  What would happen if the business owner only made, say, $200k and they had to decide whether to fund the active business growth or the passive investing growth pot?